Equity mutual funds net inflow tops Rs 10,000 crore in May

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Equity mutual funds saw net inflows of over Rs 10,000 crore in May as investors overlooked the second Covid- 19 wave to focus on corporate earnings and better growth ahead.

This is the third straight month where equity mutual funds are witnessing net inflows. It is the highest level of infusion seen since March 2020 when they saw a net infusion of Rs 11,723 crore.

Data released by the Association of Mutual Funds in India on Wednesday showed that net inflows into these schemes stood at Rs 10,083 crore in May after Rs 3,437 crore in April and Rs 9,115 crore in March. Barring equity-linked saving schemes, which saw a withdrawal of Rs 290 crore, all the equity schemes have seen inflows last month. 

Multi-cap funds saw the largest net inflow at Rs 1,954 crore. This was followed by a net inflow of Rs 1,368 crore in mid-cap funds, Rs 1,169 crore in focussed funds, Rs 1,137 crore in sectoral or thematic schemes and Rs 1,130 crore in flexi cap funds.

“This kind of consistent numbers look favourable for the mutual fund industry and for the economy as a whole as it highlights investor’s confidence and normalcy taking its hold back in the economy,’’ said Mohit Nigam, head, PMS- Hem Securities.

“We understand from the first wave of Covid that these waves will be short-lived and eventually economic activity will revive giving a boost to market sentiments. Therefore, buying on dips always makes sense and which is what reflecting in the mutual funds sales numbers quite positively,” Akhil Chaturvedi of Motilal Oswal Asset Management Company said.

Contribution from systematic investment plans was Rs 8,819 crore in May against Rs 8,596 crore in April. However, investors pulled out Rs 44,512 crore from debt mutual funds.

Stocks end in red

Profit booking from mid-noon trades on Wednesday saw stocks giving up their early gains and ending in the red. The Sensex, which oscillated in a 730-point range, closed 333.93 points at 51941.64, extending its losing streak to the second session. The index had opened higher at 52401.41 and hit a high of 52446.92. However, the gauge later fell to a low of 51717.07 and closed 0.64 per cent lower.

Though market experts feel the outlook continues to remains positive, they are now advocating caution given the lofty valuations in certain pockets, particularly the mid-cap and small-cap segments. 

The NSE Nifty slumped 104.75 points, or 0.67 per cent, to end at 15635.35. 

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